The Finnish Immigration Services has partnered with MONI, a fintech company, to give asylum seekers an official identity so they can get bank accounts and start working while they await the court’s judgement on their refugee status. MONI provides prepaid Mastercards and mobile payment accounts that are tied to individuals identified by the Finnish Immigration Services. Government benefits for refugees can then be paid using these cards, rather than in cash, and when the asylum seekers get jobs they can receive their salaries and pay taxes like any citizen.
Results & Impact
For the pilot, MONI has issued 10,000 cards and accounts to asylum seekers. The pilot started in November 2015; since January 2015, over 40,000 applications for asylum have been received. One of the first and biggest obstacles to integration is asylum seekers' lack of official identity and ability to open a bank account. Having a bank account allows asylum seekers to start contributing to the economy as soon as possible.
Finnish Immigrations Services, MONI
MONI provides each asylum seeker with a customisable mobile payment account and a MONI prepaid Mastercard. Each account is tied to an individual identified using the Finnish Immigration Services’ digital identification system. The MONI account can be accessed by smartphone and acts like a normal bank account, allowing payments and salary and benefits disbursements, but with some limitations. For example, it cannot be used to send money abroad. After three to six months in Finland, asylum seekers are allowed to work, and having these services makes it much easier for employers to hire them lawfully. Another feature of the MONI account is the "circle of trust," which allows holders of MONI cards to lend and borrow from each other at no cost, helping them to build up their credit rating.
Cost & Value
Running since November 2015
MONI will begin expanding their services to refugees in other European Economic Area countries in Autumn 2017.
The Finnish Immigration Services has joined forces with a fintech firm to give asylum seekers an official identity and get them into the banking system. For the pilot, around 10,000 cards and accounts have been issued.
Asylum seekers often arrive with no official identification documents, no permanent address and sometimes a need to remain anonymous so as to avoid repercussions from the countries they have fled. Given the strict requirements of traditional financial institutions, they struggle to open accounts.
Without an account, refugees cannot access financial services or social benefits in their new country. It’s an immediate, formidable obstacle to integration.
To overcome it, the Finnish Immigration Services teamed up with MONI, a Helsinki-based fintech startup, to provide asylum seekers with customisable mobile payment accounts and prepaid Mastercards while they await the court’s judgement on their asylum application.
The Finnish Migration Services tied each account to an individual identified using their digital identification system. They use the migrant’s asylum seeker ID, which is linked to a biometric police record, to guarantee their identity and allow them to open an account.
The accounts are then accessible by smartphone and offer many of the same services as a traditional bank account, including the ability to make payments and to receive government benefits or salary disbursements.
After three to six months, asylum seekers are given permission to start working. But for Finnish employers, paying someone in cash requires a lot more paperwork, which means asylum seekers without bank accounts often cannot find work even then. By bringing them into the banking system, MONI’s services let asylum seekers start contributing to the economy as soon as possible.
And from a security perspective, the cards mean that refugees aren’t carrying around lots of cash. They can also remotely lock their card if it is stolen.
Another feature is the “circle of trust” that documents any money that the user lends to or borrows from their friends, which can be done without interest or costs. This in turn – assuming they are dutiful friends – helps them build up credit scores. As asylum seekers arrive with zero credit history in their new country, this gets them into a position to borrow money from financial institutions.
Altogether, the services offered by MONI promote financial inclusion and accelerate integration. The interface is available in a range of languages, including Finnish, English and Arabic. More are in the works.
There are certain deliberate limitations on the services offered by MONI, though. The Financial Supervisory Authority have, for example, made it impossible for the accounts to transfer money to other countries.
However, if an asylum seeker is granted refugee status they can upgrade their MONI account and such limitations will be removed.
In the future, MONI aims to go further. They are developing a model for automated tax collection from self-employed refugees and entrepreneurs through smart contracts on their platform. This would, at a stroke, reduce tax collection costs for the government and allow entrepreneurial refugees to get to work faster and start contributing to the Finnish economy.
Finland isn’t the only place that could benefit from this scheme. Because of Europe’s cross-border E-Money Directive, this solution could be used across the continent to help migrants open accounts. Hundreds of thousands of asylum seekers across Europe could be brought into the financial system.
(Picture credit: MONI)